Correlation Between Align Technology and De Grey
Can any of the company-specific risk be diversified away by investing in both Align Technology and De Grey at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Align Technology and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and De Grey Mining, you can compare the effects of market volatilities on Align Technology and De Grey and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Align Technology with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and De Grey.
Diversification Opportunities for Align Technology and De Grey
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Align and DGD is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining and Align Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Align Technology are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Align Technology i.e., Align Technology and De Grey go up and down completely randomly.
Pair Corralation between Align Technology and De Grey
Assuming the 90 days horizon Align Technology is expected to under-perform the De Grey. But the stock apears to be less risky and, when comparing its historical volatility, Align Technology is 1.12 times less risky than De Grey. The stock trades about -0.23 of its potential returns per unit of risk. The De Grey Mining is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 118.00 in De Grey Mining on October 13, 2024 and sell it today you would lose (4.00) from holding De Grey Mining or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Align Technology vs. De Grey Mining
Performance |
| Timeline |
| Align Technology |
| De Grey Mining |
Align Technology and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and De Grey
The main advantage of trading using opposite Align Technology and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, De Grey can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in De Grey will offset losses from the drop in De Grey's long position.| Align Technology vs. Unity Software | Align Technology vs. Taiwan Semiconductor Manufacturing | Align Technology vs. UPDATE SOFTWARE | Align Technology vs. MagnaChip Semiconductor Corp |
| De Grey vs. TRADEGATE | De Grey vs. Canon Marketing Japan | De Grey vs. Cincinnati Financial Corp | De Grey vs. JSC Halyk bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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